Learn How to Use Loan Eligibility Calculator

Home loans offer several advantages — they allow borrowers to build an asset while paying EMIs in an easy, convenient and comfortable way. Further, they also allow borrowers to save big by way of home loan tax benefits. In India, a couple who has taken a joint home loan can avail of tax benefits up to Rs.7 Lakh by way of a home loan. It is, therefore, not very surprising that most home buyers want to avail of a home loan to fund the purchase of their home. However, not everyone qualifies for a home loan. Lenders want to lend money only to those who they think will be able to repay the loan without defaulting. To minimizes chances of loan default, lenders set strict home loan eligibility criteria that borrowers must meet if they wish to qualify for a home loan. One can calculate their home loan eligibility using a home loan eligibility calculator. In this article, we discuss the benefits of this handy tool and give you reasons why you must use this tool. 

What is a Home Loan Eligibility Calculator? 

Lenders calculate a borrower’s eligibility for a home loan and the home loan amount they qualify for based on several factors, such as monthly income, current debt situation, past repayment behaviour, etc. A home loan eligibility calculator allows borrowers to understand whether they qualify for the loan amount they wish to avail of. A home loan eligibility calculator helps borrowers avoid loan application rejection, which is something one must avoid as loan rejection negatively impacts a borrower’s credit rating and their chances of getting approved for a loan. 

Most home loan eligibility calculators are easy to use and ask borrowers to input basic information, such as monthly income, existing EMI obligation, age, the city they live in, etc. Some calculators can ask for more information also, such as additional sources of income, desired loan tenor, etc. The tool considers all these factors to calculate an individual’s home loan eligibility. In simpler words, the calculator tells a borrower the home loan amount they can afford to take and the EMIs they can afford to pay each month.

Follow these steps to use a home loan eligibility calculator to calculate your home loan eligibility. 

– Go to your lender’s website and access the tool. 

– Next, enter your date of birth as well as your city of residence. 

– After this, depending on the calculator you are using, you will be asked to enter additional information, such as current monthly salary, additional sources of income, desired loan tenor, current debt situation, etc. Once you enter this information, the home loan eligibility calculator will give you the loan value you qualify for. 

Now, before we tell you how can a home loan eligibility calculator prove beneficial for you, let us look at the factors that affect home loan eligibility. 

Factors That Determine Home Loan Eligibility 

Before you apply for housing loan in India, it is crucial to develop an understanding of the factors that affect home loan eligibility. Developing an understanding of these factors will allow you to get approved for a home loan quickly as well as get a low home loan interest rate and save more in the long run.


An individual’s CIBIL score is one or the most crucial factors that affect an individual’s home loan eligibility. It’s because the credit score indicates a borrower’s repayment capacity and creditworthiness and the risk involved in lending them money. Ideally, to be eligible for a home loan, borrowers must have a credit score of 750 or above. 

Age of the Borrower 

Lenders offer better home loan deals and low home loan interest rates to young borrowers as these borrowers have more working years ahead of them and are more likely to see more hikes and promotions in their life. Thus, home loan eligibility of young borrowers is higher than the home loan eligibility of borrowers in their late 40s or early 50s. 

FOIR or Fixed Obligations to Income Ratio 

Your FOIR tells a lender your current debt situation.  If your FOIR is too high, it means you already have too many EMIs running. In such a situation, the borrower will consider lending you money as a risky affair. To be eligible for a home loan, your FOIR must be below 40%.

Why You Should Use a Home Loan Eligibility Calculator? 

Here are some reasons why you should use a home loan eligibility calculator before taking a home loan.

– The home loan eligibility calculator tells you the amount you are eligible for and saves you from experiencing loan rejection. 

– The calculator also tells you the home loan amount you can afford. If you combine a home loan eligibility calculator with a home loan EMI calculator, you will know the loan value and EMI amount you can afford. This will help you plan your monthly budget in such a way that you always have enough money to cover all your EMIs. 

– Lastly, the calculator is easy to use and free as well. So, use it to your best advantage.

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